Transfer pricing in a recession

What companies should consider

Many multinational companies are experiencing significant operating losses as a result of the global economic crisis. These losses, which cut across industries and geographies, are totalling hundreds of millions, if not billions, of dollars. Yet despite the response of central banks and governments to ease monetary conditions—reducing interest rates, lending money to companies, and infusing cash into global economies—it is far from clear whether (and when) these steps will bear fruit.

The recession certainly will affect transfer pricing—but how?

Uncertain economic times bring both challenges and opportunities for multinationals managing transfer pricing. This PricewaterhouseCoopers article, Transfer pricing in a recession, addresses how companies can make the most of these difficult conditions. It discusses how to use benchmarking data to document present and past transfer prices, and demonstrates how the judicious use of both existing and new advance pricing agreements can help them defend, document, and optimise their intercompany transactions.

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